General Metals Industry
May 1, 2016 / best practices, customer satisfaction metrics, industry news, KPIs, lean manufacturing, LIT, operations metrics, performance metrics, productivity, quality, strategic planning
As companies look for new ways to stay competitive, more and more manufacturers are utilizing “big data” and analytics in their operations. In fact, according to the results of a survey from Deloitte and the Council on Competitiveness, these types of advanced technologies have the power to put the U.S. back on the map as the most competitive manufacturing nation.
“CEOs say advanced manufacturing technologies are key to unlocking future competitiveness,” the report summary states. “As the digital and physical worlds converge within manufacturing, executives indicate the path to manufacturing competitiveness is through advanced technologies, ranking predictive analytics, Internet-of-Things (IoT), both smart products and smart factories via Industry 4.0, as well as advanced materials as critical to future competitiveness.”
Specifically, the report states that the application of these more advanced and sophisticated product and process technologies will help the U.S. and other traditional manufacturing powerhouses of the 20th century (i.e. Germany, Japan, and the United Kingdom) reclaim their spots as the most competitive nations in 2016. The U.S. in particular is expected to take the number one spot away from China by the end of the decade.
What does this mean for industrial metal-cutting organizations? It means that if you haven’t already considered using data and software analytics in your facility, it may be time to revisit the idea. If data-driven manufacturing has the ability to make nations more competitive, that certainly says something about what it can do for individual companies.
Metrics that Matter
For many industrial manufacturers, the thought of using data may seem a bit daunting; however, it doesn’t have to be as complicated as it sounds. For example, a metal service center featured here in a white paper started by developing an internal software system that automatically tracks the number of square inches processed by its existing sawing equipment. At any point, the manager can go to a computer screen, click on a particular band saw or circular saw, and see how many square inches each saw is currently processing and has processed in the past. Gathering this type of data allows the service center to easily track trends and quickly detect problem areas.
Richards Industries, a Cincinnati, OH, company that manufactures industrial valves, is using data in a similar way, according to a recent article from Modern Machine Shop. Although the company has been practicing lean manufacturing for years, it recently installed a machine-monitoring system that enables shop floor personnel to track activities and record the performance of its machine tools. “Like readings from a Fitbit or Jawbone, the data gathered and analyzed by this system is making the company more aware of how well machine time and manpower count toward productivity,” Modern Machine Shop reports.
Of course, these are just two examples. There are many other ways manufacturers can utilize data and advanced analytics to improve their operations. An article from IndustryWeek calls out a few key metrics industrial metal-cutting companies should consider as they implement data and analytics tools into their factory:
- Line speed by product. Take note of when and how often your line manufactures certain types of products; and then use tools to track the time and effort required to generate meaningful output for each. That way, you’ll have a better handle on what mix would produce the greatest profit.
- Granular utilization data. Look at the specific days and hours your factory produces its greatest output, as well as at what mix and with which operators on the floor. In other words, study the conditions that lead to the very best outcomes and then seek to reproduce those outcomes on a regular basis.
- Error rates correlated by product and employee. Avoiding mistakes is every bit as important as optimizing your mix and hours on the floor. Use Big Data and analytics tools to study error rates and then correlate the results by product and employee.
- Assembly speed by product and employee. Careful and error-free production is important, but so is speed, especially for facilities that deal with high volume. By using data and analytics tools to segment production, you can get a clearer understanding of what products are easier to produce and then ask your floor leaders why.
Whether you decide use data to gain productivity, monitor machines, or improve quality, the point is that data-driven manufacturing is here, and companies big and small are taking advantage of its many benefits. If you haven’t jumped on the bandwagon yet, don’t get overwhelmed. Just get started.
How are you utilizing data to improve your operations and stay competitive?
General Metals Industry
April 1, 2016 / agility, continuous improvement, human capital, industry news, lean manufacturing, LIT, maintaining talent, operator training, preventative maintenance, quality, strategic planning, supplier relationships, supply chain
Although many hoped that 2016 was going to be a year of full recovery and growth, expansion in the industrial manufacturing sector has been slow moving. High inventory levels, a strong dollar, falling commodity prices, and a slowdown in China have left many industrial metal-cutting companies disappointed and more than a little cautious.
Evidence of slow growth started at the end of 2015. According to estimates from the Manufacturers Alliance for Productivity and Innovation (MAPI), manufacturing industrial production was unchanged from the third to the fourth quarter of 2015. Monthly data has shown erratic patterns of growth and decline that have pretty much cancelled out any movement forward—a trend that is expected to continue.
“We expect the volatility to continue through the first half of 2016, a situation that will result in essentially no manufacturing production growth,” MAPI stated in a recent report. “Manufacturing production should be flat in the first and second quarters of 2016 before accelerating to a 3-percent annual rate in the second half of 2016.”
For the entire year, MAPI expects manufacturing production to decelerate rather than accelerate compared to 2015. “Production increased 2 percent last year, and we forecast only 1.1-percent growth in 2016,” MAPI states. The good news is that MAPI predicts growth in industrial manufacturing of more than 2 percent for both 2017 and 2018.
Unfortunately, the forecast for steel demand also shows little to no growth, although 2016 is expected to be an improvement over 2015. According to the Short Range Outlook 2015-2016 from the World Steel Association (worldsteel), global steel demand decreased 1.7 percent in 2015 but is expected to grow by 0.7 percent in 2016.
“It is clear that the steel industry has, for the time being, reached the end of a major growth cycle which was based on the rapid economic development of China,” Hans Jürgen Kerkhoff, chairman of the worldsteel Economics Committee, said. “Combined with China’s slowdown, we also face low investment, financial market turbulence, and geopolitical conflicts in many developing regions.”
The only bright spot is that steel demand in developed countries is expected to show positive growth of 1.8 percent this year. The U.S. in particular should see demand increase by 2 percent in 2016, worldsteel predicts.
While no one wanted the year to start off slow, most manufacturers aren’t too surprised. In a roundtable discussion with Metal Center News (MCN), Michael Bush, a vice president at Esmark, Inc., was quoted as saying that he didn’t expect the market to pick up until at least May. “Even though it will pick up in the second half, we expect 2016 to be down 1 percent for the year,” Bush told MCN. “That’s our general feeling going into the market.”
Bush isn’t alone. The American Metals Market annual survey of metals executives showed that 30 percent of respondents in the steel, aluminum, and other metals sectors expected business to be worse in 2016, and 70 percent predicted that the domestic economy would not fully turnout until 2017 or later. (You can read the full report here.)
The reality is that the U.S. is still in the middle of an economic recovery, which means that metal-cutting companies and other manufacturers won’t likely see any major growth this year. According to MAPI, manufacturing industrial production must grow another 3 percent in order to reach the pre-recession production level achieved in the fourth quarter of 2007, which means a full recovery is expected in the third quarter of 2017. Non-high-tech manufacturing production is 5 percent below the prerecession level and will not be fully recovered until the third quarter of 2018.
On a positive note, the latest numbers from the Institute for Supply Management (ISM) show some improvement. As reported by Plant Engineering, ISM’s monthly Purchasing Manufacturers’ Index (PMI) jumped 2.3 percentage points in March to 51.8 percent, putting the index solidly above the 50-percent growth threshold for the first time in 2016.
Out of 18 manufacturing industries, ISM says that 12 reported growth in March, including Fabricated Metal Products and Primary Metals. One survey respondent from the Primary Metals segment stated, “Our business is still going strong.” Another respondent from the Fabricated Metals Products segment said, “Capital equipment sales are steady.”
The big question, of course, is will this momentum continue? Analysts believe that continued growth will depend largely on continued strong employment because it creates new income growth and a solid base of consumer spending. MAPI says that another impetus is easy credit availability, which propels big-ticket spending for motor vehicles, residential housing, and nonresidential construction.
While the overall data is certainly sobering, there are a few signs that suggest the metals sector can still snap out of the lull. As Modern Metals recently reported, “The average age of a vehicle on the road still exceeds 10 years; construction season is coming and Congress passed a long-term highway bill in December.”
Metal executives participating in MCN’s roundtable believe that automotive—which is predicted to top 17 million vehicles this year—will be the big market driver, as well as residential and nonresidential construction, white goods, and anything associated with “green energy.”
A report from Fabricating & Metalworking says that surviving 2016 will require manufacturers to use the current market conditions to their advantage. “U. S. manufacturers should be aggressive to take advantage of falling costs while at the same time finding new opportunities created by these economic forces,” the report says. Specifically, the article states that companies should consider employing two key strategies:
- Target those markets that benefit from lower energy and commodity prices such as transportation.
- Modify supply chains to reflect the new realities.
From an operations standpoint, continuous improvement activities will continue to be critical for industrial metal-cutting companies as they push through this slow period. Finding ways to optimize what is happening inside your shop doors is perhaps one of the most effective ways to balance the uncertainty of what is happening outside your doors. What does that look like? An eBook from the LENOX Institute of Technology’s lists five performance-boosting best practices that can help metal-cutting companies improve internal operations:
- Get lean. Although lean manufacturing is not a new movement, it is evolving. Companies that “got lean” years ago are focusing on continuous improvement, and a growing number of high-mix, low-volume operations are tweaking traditional lean methodologies to fit their specific situation. Regardless of your organization’s size, lean manufacturing should be at least part of your operational strategy.
- Invest in human capital. Industry data indicates that metal executives tend to invest in technology over people, but the tide is changing as the manufacturing industry deals with a serious shortage of skilled production workers. Managing this skills gap will require changing the way companies train and maintain talent, whether by beefing up training programs or rethinking their hiring tactics.
- Focus on quality as a process. There is no question that speed and agility are critical in today’s fast-paced market, but managers need to make sure that meeting demand doesn’t come at the expense of accuracy. To meet this challenge a growing number of market leaders are putting practices in place to ensure that their quality goals are met and maintained.
- Embrace preventative maintenance. In almost every manufacturing operation, machine breakdowns are one of the top causes of lost productivity. While some downtime is inevitable, proper maintenance and proactive care of equipment and tooling can reduce its occurrence. One benchmark survey revealed that 67 percent of industrial metal-cutting operations that follow all scheduled and planned maintenance on their machines also report an upward trending job completion rate.
- Form strategic supplier relationships. In today’s competitive marketplace, it is easy to base supplier relationships on price. However, a growing number of manufacturing leaders are placing more value on their supply chain. By leveraging the knowledge and services of trusted suppliers, companies can turn vendor relationships into strategic partnerships that have a real impact on the bottom line.
Ready and Waiting
All things considered, 2016 won’t likely be a banner year for industrial metal-cutting organizations. However, not all hope is lost. Recent upticks in manufacturing may indicate some positive (albeit slow) momentum, and many experts believe growth is in the long-term future, even if we have to wait another year. Until then, metal-cutting companies can continue to apply strategies that address external trends while also improving internal operations, putting them in the best position possible when the market finally turns around.
General Metals Industry
March 15, 2016 / agility, best practices, continuous improvement, industry news, LIT, productivity, resource allocation, strategic planning
In today’s competitive marketplace, a successful business is an agile business—one that can adapt to changing factors and provide a product deemed valuable by the buyer. An unsuccessful business, on the other hand, is one that refuses to evolve and innovate.
Take, for example, the Blockbuster video rental chain, which met its demise after it refused to partner with Netflix, or Blackberry, the smart phone pioneer that ended up failing miserably once Apple released iPhone. Both are prime examples of companies that failed to adapt to the times, but they are definitely not the only ones. In fact, only 57 companies have made the Fortune 500 list every year since the list’s inception in 1955.
The industrial metal-cutting industry is no exception and has certainly seen its fair share of fallen companies in recent years. Fluctuating demand and volatile market conditions have proved that success requires adaptation, innovation, and continuous improvement. Market survival has required metal-cutting companies to find new ways to gain productivity and run more efficiently with fewer resources. It’s also required them to focus on product and manufacturing innovation by streamlining production, maximizing efficiencies, and adopting new manufacturing equipment and technologies.
As explained by an article from IndustryWeek, this type of “manufacturing innovation” is fairly common in today’s market as manufacturers seek to gain a competitive edge through reduced costs and speed to market. However, one form of innovation that many companies fail to embrace is what IndustryWeek defines as “business model innovation.”
“Probably the most difficult type of innovation for manufacturing CEOs, however, will be in catalyzing business model innovation,” the article states. “The fact is that traditional business models are coming under increasing pressure as new, more nimble competitors take advantage of their agility to create and dominate new market segments and sales channels.”
The article goes on to explain that today’s demanding business environment requires manufacturing executives and their management teams to think more holistically about innovation, their operating models, and even how their products and services meet their end customers’ needs. Put simply: Innovation needs to touch every aspect of your industrial metal-cutting operation.
What does that look like? IndustryWeek lists five fundamental ways manufacturers can be innovative and successful:
- Run at multiple speeds. The rate at which typically you invest and at which you may need to invest in the future can be dramatically different. Allow yourself to invest, and take advantage of new technologies, when you need to by integrating flexibility into your business plan.
- Recognize the inflection point. Stay on top of industry developments to ensure you don’t miss the point where an emerging trend becomes the next big thing. Missing out could mean the difference between expanding and shutting down.
- Create an innovative culture. Encourage employees to try new things. Motivate and reward breakthrough innovation while keeping in mind the risks and outcomes. Balance that culture with day-to-day operations.
- Adapt the business model. Change is imperative for survival. Whether you need to defend the company against a new competitor, respond to customer demands or seize an opportunity, be ready to adapt your existing business model and create new ones. The Internet of Things (IoT), data and analytics can dramatically evolve operations.
- Have a long-term vision. Develop a clear vision of how your innovation investments align to your long-term business goals. Share that vision with employees, suppliers, customers and shareholders.
This concept is certainly applicable to the metals industry. Aluminum producer Alcoa, for example, recently revamped its product portfolio to meet changing market conditions. As reported by Modern Metals, Alcoa has announced plans to close or curtail its refinery and smelting operations to focus on its rolled sheet products for the aerospace and automotive industries, for which products have more than doubled compared to the prior year.
Another example is Jett Cutting Service, Inc., a 30-year old shop featured here in a case study from the LENOX Institute of Technology. Starting out with just band saws, the industrial metal-cutting company has grown over the years to better serve its customers, acquiring new companies and expanding its capabilities to become a multi-faceted cutting service. From precision circular saw cutting to a lathe cut-off on round tubing, Jett Cutting has evolved into a whole processor that serves steel service centers, machine shops, and some producing mills.
As both examples illustrate, innovation within the metal and metal-cutting industries has more to do with adaptation and strategic planning than with ground-breaking “disruptive” innovation. In other words, no one expects your industrial metal-cutting organization to be the next Google, but the fact remains: Success requires innovation and evolution. Today’s industrial metal-cutting companies need to remain innovative in both their manufacturing operations and business models to meet changing demands and, more importantly, to achieve long-term success.
Is innovation part of your company’s strategic plan? What strategies can you implement to ensure long-term success?
General Metals Industry
March 1, 2016 / benchmarking, best practices, continuous improvement, Cost Management, industry news, LIT, operations metrics, strategic planning
Today’s industrial metal-cutting executives face enormous challenges. While the goal has always been for manufacturers to do more with less, that expectation has intensified in recent years. Increased pricing pressures, global competition, and customer expectations are just a few of the current issues that are putting a strain on even the most efficient metal-cutting operations.
This has pushed many companies to look for new ways to manage their operations. In fact, a Global Operations Survey from PwC found that industry leaders are “reimagining operations” by aligning it with business strategy.
“These leaders don’t think of operations as mere utilities,” the PwC report states. “Instead, they see new opportunities to drive their company’s destiny like never before. They are cultivating a coordinated set of operational strengths based on what customers want and what fits with company strategy.”
After surveying more than 1,200 operations leaders across various industries, PwC uncovered several trends that are shaping the way companies are running their operations. Below are the report’s four key insights:
- Knowing what customers value is a real and persistent challenge for operations executives. This can make it difficult to set priorities, manage costs in a strategic way, and choose the right tradeoffs when necessary.
- Companies plan to do more than just improve existing processes. Today’s leaders are looking for ways to transform their businesses without letting day-to-day performance slip.
- Operations itself is being reimagined. Leading companies realize they need a model that aligns operations with business strategy and helps them stay resilient in the face of significant change.
- Strategically aligned companies are more confident and more likely to focus on a few differentiating capabilities. When taking this path, there are two dimensions to consider: what customers value in your chosen markets and your company’s existing operational strengths.
One of the studies most important suggestions was that companies need to design their operations around their customer. “Without this understanding, we often see operations stretched too thin,” Mark Strom, PwC’s Principal and Global Operations Leader, told Supply Chain Management Review. “When one team tries to innovate, they come in direct conflict with an operational assignment to cut costs – or they create some new complexity that’s harder to manage.”
Another takeaway from the survey was the importance of collaboration within an organization. Hyper-efficient silos, the report says, should no longer be the goal. In fact, PwC found that 61% of operations leaders believe cross-functional collaboration has the greatest potential for helping the company reach its strategic goals.
While the PwC survey was done across geographies and industries, research specific to industrial metal-cutting confirms that new approaches to operations management can offer tangible benefits. For example, data from a benchmark survey of leading fabricators, metal service centers, and other metal-cutting organizations suggests that companies with high machine uptime can gain efficiency by investing in smarter, more predictive and more agile operations management approaches.
Specifically, the survey found that 67% of industrial metal-cutting operations that follow all scheduled and planned maintenance on their machines also report that their job completion rate is trending upward year over year—a meaningful correlation. “The implication is that less disruptive, unplanned downtime and more anticipated, planned downtime translates into more jobs being completed on time,” states a summary of the survey findings.
Is it time for your organization to rethink or “reimagine” its approach to operations management? Based on the findings of the aforementioned studies, there are a few questions today’ managers should consider:
- Could you encourage better collaboration among departments?
- Could your customer play a larger role in your management decisions?
- Could you use more predictive strategies to minimize downtime?
If the answer to any of these questions is yes, then perhaps it is time for a change.
General Metals Industry
February 15, 2016 / benchmark study, best practices, Cost Management, industry news, LIT, ROI, strategic planning
In general, growth is good in business. It means more customers, more orders and, typically, more profit. Growth also typically indicates a healthy market, a stable economy, and increased market demand.
In today’s uncertain market, however, industrial metal-cutting companies are finding that growth might not be possible, and in some cases, shouldn’t even be the goal.
According to the Metal Service Center Institute, December metal shipments and inventory levels for both steel and aluminum declined 11.4% and 21.7%, respectively, from December 2014. In addition, the Institute for Supply Management’s January Purchasing Managers Index rating of 48.2% indicates a contracting manufacturing industry for the fourth consecutive month. (A reading above 50 indicates expansion; below 50 indicates contraction).
This has left many industrial metal-cutting companies unsure about how to grow while balancing fluctuating demand, raw material costs, and shop floor process and machinery improvements. A recent survey conducted by the Fabricators & Manufacturers Association Intl., for example, concluded that small and medium-sized job shops and fabricators are “facing a lot of headwind and uncertainty,” according to a report from The Fabricator. While most of the survey respondents believe their companies will grow in 2016, only 39% were positive and a significant 23% said conditions aren’t getting any better.
The reality is that based on current conditions, growth in the traditional sense probably isn’t going to happen in 2016 for many manufacturers. In fact, according to the article, “Achieving Smart Growth: A Guide for U.S. Manufacturers” from manufacturing.net, growth may not be the healthy—or profitable—path to take.
Before trying to achieve growth of any kind, the article states that manufacturing executives should ask themselves a few key questions:
- Is there an ideal size for my business so as not to compete with current business while avoiding administrative costs?
- What is my greatest profit opportunity? Is it expanding sales or increasing efficiency?
- How do I ensure increased sales that lead to higher profitability?
- How long is growth sustainable and are we prepared for slowdowns?
- What will help manage cash flow during ups and downs?
Once companies answer these questions, the article states that “smart growth” is possible. What is “smart,” however, will look different at every manufacturer, depending on its unique circumstances. For example, a “smart” path for one company could mean maintaining their current size and optimizing operations, while another manufacturer might want to consider making some larger investments to achieve bottom-line growth in the future.
The manufacturing.net article says regardless of the circumstances, there are three key principles all companies should follow for “smart growth”:
- Plan. This includes defining objectives, planning how to achieve growth, and identifying risks. Managers should review their plans quarterly and change as needed.
- Invest. This includes looking for profit-generating opportunities for your business. Whether it’s through technology or training, managers should actively find new ways to improve the status quo.
- Fund. Managers need to find a balance between cash and credit. Relying on cash keeps interest costs away and demands financial discipline. However, relying solely on it can limit a company’s ability to grow when opportunities arise.
As reported in a benchmark study from the LENOX Institute of Technology, many of today’s metal-cutting companies exist because of their ability to survive even the toughest market conditions. However, best-in-class operations know they cannot afford to rest on their laurels. By developing a tactical, healthy “smart growth” strategy, industrial metal-cutting companies can continue to find opportunity, identify areas of improvement, and achieve long-term success, even in uncertain times.
Do you have a “smart growth” plan for 2016? What strategies are you using to ensure success?
General Metals Industry
February 1, 2016 / best practices, continuous improvement, industry news, productivity, quality, Safety, strategic planning, workflow process
There is no question that mobile technology has transformed the consumer and corporate worlds. Having instant access to people and information has enabled conveniences and efficiencies we have all come to expect. However, the constant barrage of information typically brings some distraction along with it—a fact that has some manufacturers questioning whether or not mobile technology belongs on the shop floor.
Of course, some of this concern is founded. While distraction can certainly cause delays in productivity, it also presents some serious safety concerns, especially for machine operators. In fact, one machine shop, featured here in Modern Machine Shop magazine, banned cell phone use in their facility to avoid a hike in their insurance premiums. The machine shop said the ban has also increased productivity and even helped it win a new customer.
However, that’s not to say that there isn’t room for any mobile technology on the floor. Quite the opposite is true. A growing number of manufacturers are finding that technology has plenty of applications, especially when it comes to streamlining work processes and eliminating paperwork. For example, a customer survey conducted by software provider Canvas found that companies are using mobile apps for the following tasks, most of which used to be paper-based:
- Inspections (46%)
- Work Orders (31%)
- Checklists (28%)
- Surveys (19%)
- Invoices (15%)
- Inventories (8%)
- Other (34%)
An article from Forbes states that mobile technology is not only becoming more prevalent in manufacturing, it is revolutionizing the industry. “CEOs prioritizing the strategic importance of mobile technologies are driving a revolution in manufacturing today,” the Forbes article says. “Designing mobility into new production strategies, processes and procedures is bringing greater accuracy and speed to production centers. Augmenting existing processes with mobility is delivering solid efficiency gains. The net result is greater communication, collaboration and responsiveness to customer-driven deadlines and delivery dates than has been possible before.”
From quality audits and checklists to electronic work instructions (EWI) and real-time alerts, leading companies are finding a host of ways to use mobile technologies in their manufacturing environments. But before you go investing in a boxful of tablets and software apps, there are some considerations. An article from American Machinist offers seven tips for managers who want to bring mobility into their operation. Below are five of the tips (you can read the full seven here):
- Evaluate readily available solutions. Instead of assuming you have to start from scratch, inquire about the mobile offerings from manufacturing operations’ management, quality management, maintenance management, environment, health, and safety, and other solutions providers with hosted or on-premise solutions already deployed in your manufacturing environment.
- Avoid extra hardware investment. For a reasonable ROI, it’s important to prioritize investments that do not require specialized hardware beyond the mobile device, where possible. This could include work-issued mobile devices like tablets or smart phones, or you may want to consider instituting a bring-your-own-device (BYOD) policy.
- Prioritize user-interface (UI) simplicity. During the selection process, focus on strength of the user interface, user experience, and general intuitiveness of the solution. Generally, people demand the usability of products like the iPhone, where they can start making use of it with little time or direction.
- Remember that success leads to success. Mobile solutions for all aspects of manufacturing are emerging fairly quickly, which increases the pressure to choosing the right solution. Actual case studies and ROI analyses (when possible) should be required during the solution selection process.
- Take advantage of native functionality. With advances in smartphone functionality happening every year, solutions should be evaluated with the understanding of what the host device is capable of doing. For example, if a corrective action app cannot incorporate pictures as attachments to support root-cause analyses, there probably is another, similarly priced solution that can do it.
In the end, there is a lot to consider before choosing the right mobile technologies for your shop, but most manufacturers are finding it is worth “going mobile” on some level. In fact, according to PwC’s 18th Annual Global CEO Survey, mobility is the top technology priority among industrial manufacturing CEOs.
If mobility isn’t on your radar yet, you may want to seriously reconsider. Slowly but surely, industrial manufacturers are finding that there is indeed “an app for that,” which means your metal-cutting operation may be missing out on some prime opportunities for efficiency gains and cost savings.
General Metals Industry
January 15, 2016 / benchmarking, best practices, blade failure, bottlenecks, continuous improvement, LIT, predictive management, preventative maintenance, productivity, strategic planning
The U.S. manufacturing landscape is changing, and industrial metal-cutting companies are no exception. Technology has created an increasingly connected industry, and manufacturers are realizing that while traditional lean practices have proved successful in the past, when it comes to operational efficiency, data and other advanced “smart” technologies are the wave of the future.
One area that is quickly gaining popularity is the use of predictive technologies. As reported in a recent Manufacturing.net article, nearly three dozen manufacturing company executives and national research facility directors identified predictive data analytics as the number one advanced manufacturing technology critical to growth, as part of a study conducted by Deloitte Global and the U.S. Council on Competitiveness.
Predictive analytics utilizes a variety of statistical and analytical techniques to develop mathematical models that “predict” future events or behaviors based on past data. As the study explains, this allows companies to uncover hidden patterns, relationships, and greater insights by analyzing both structured and unstructured data.
Several industries are already benefiting from the use of predictive technologies. Healthcare, for example, is using predictive analytics to improve the effectiveness of new procedures, medical tests, and medications. Manufacturing companies are using the technology to identify quality and production issues, as well as optimize delivery and distribution. Other industries, such as aerospace, automotive, and consumer products, are also finding interesting applications.
Thyssen Krupp, for example, recently used predictive analysis to improve the reliability of more than 1.1. million elevators it maintains worldwide. With the help of Microsoft cloud technology, the company gathered data from thousands of sensors and systems in its elevators to measure motor temperature, shaft alignment, cab speed and door functioning. After being sent to the cloud, the data is then displayed on a single dashboard in real-time. The data is also used in predictive model formulas, helping technicians know when and where a failure may occur.
The trend is also finding its way into industrial metal cutting. Data from the LENOX Institute of Technology’s Benchmark Survey of Industrial Metal-Cutting Organizations suggests that investing in smarter, more predictive operations strategies can help companies gain additional productivity and efficiency on the shop floor.
Although not through the use of analytics, the benchmark survey found that industry leaders are using strategies such as planned maintenance and blade care to prevent downtime and predict blade failure. Specifically, the benchmark study found that:
- 67% of industrial metal cutting operations that follow all scheduled and planned maintenance on their machines also report that their job completion rate is trending upward year over year—a meaningful correlation. The implication is that less disruptive, unplanned downtime and more anticipated, planned downtime translates into more jobs being completed on time.
- 51% of organizations that “always” follow scheduled and preventative maintenance plans say that blade failure is predicted “always” or “mostly.”
While there is no question that predictive analytics is still an emerging area, it is clear that proactive strategies are key in today’s uncertain market. Whether you invest in advanced predictive analytics software or simply stick to your preventative maintenance program, finding ways to anticipate future events and reduce unplanned downtime can help your operation gain efficiency and, more importantly, stay competitive.
What predictive operational strategies are you using to make your operation more efficient?
General Metals Industry
January 1, 2016 / best practices, industry news, LIT, maintaining talent, operator training, skills gap, strategic planning
For the last few years, analysts and industry experts have spent a lot of time and money trying to figure out how to solve the manufacturing industry’s current skills gap. Research studies, conferences, webinars, and trade articles have widely discussed the issue, which seems to be getting more and more challenging by the day.
As a new eBook from the LENOX Institute of Technology explains, there are several layers to current workforce challenge. First, skilled production workers are one of the largest workforce segments facing retirement in the near term, which will have an impact on the number of experienced workers on the shop floor.
Meanwhile, the current talent pool isn’t what it should be. Streamlined production lines and more process automation have changed the nature of manufacturing work, and the incoming generation of workers either isn’t interested in working anywhere near a production line or lacks the necessary skills and technical knowledge.
While there is no silver bullet solution to the skills gap issue, some manufacturers are addressing the current problem by dragging out some old strategies. Specifically, some manufacturers are bringing back their apprenticeship programs to help fill their employee pipeline.
ArcelorMittal, for example, recently refreshed its apprenticeship program in an effort to recruit more maintenance technicians, according to an article from IndustryWeek. “We realized we would be losing in excess of 200 mechanics and electricians per year,” Gary Norgren, ArcelorMittal’s manager of raw materials, told IndustryWeek. “We decided we would never be able to keep up with that with internal candidates, so we needed to do something new.”
To address the issue, the steel company has partnered up with local colleges to develop coursework in areas such as welding, metallurgy, physics, hydraulics and pneumatics. The company also participates in a program that allows students to take two eight-week internships at their local ArcelorMittal plant, where they work alongside experienced technicians. In addition, students who would like to be considered for employment after graduation can take an entrance exam, but it has to be completed during their internship. “That way, if there are areas they feel they’re weak in, they can get extra help from their mentor right on the spot,” the article explains.
Many others, including big names like Bosch Rexroth, Volkswagen and Siemens, have developed similar programs. Oberg Industries, a manufacturer of precision components and tooling, says it has always relied on its apprenticeship program, which dates back to 1971. According to an article from the U.S. Department of Labor web site, Oberg believes its apprenticeship program offers the following four benefits:
- It ensures that all employees will have the job competency skills the company needs to be successful today and tomorrow and instills our corporate values and culture in new employees.
- Provides each apprentice with the ability to earn family-sustaining incomes and learn a skill at the same time.
- Establishes a culture of continuous learning for incumbent workers.
- Contributes to the overall success of the organization by enhancing the company’s reputation, strengthening its brand, and setting it apart from the competition.
While apprenticeship programs certainly have a “dated” feel to them compared to many of today’s fast-paced hiring tactics, they could also be exactly what manufacturing needs—again. For an industry that has spent a lot of the last few decades focusing on process and efficiency, maybe it’s time to place the focus back on people. By investing time and resources in building a skilled workforce, you are ultimately investing in your company’s long-term success.
How is your company recruiting and building a skilled workforce? Could apprenticeship or internship programs help close the skills gaps in your operation?
General Metals Industry
December 15, 2015 / best practices, industry news, LIT, maintaining talent, operator training, skills gap, strategic planning
It’s no secret that the manufacturing industry is facing some serious workforce challenges. As we reported in this white paper and several blog posts, skilled production workers are one of the largest segments facing retirement. This, coupled with increased demand, is leaving industrial metal-cutting companies no choice but to find new ways to hire, train, and maintain skilled employees in order to remain successful and competitive in today’s market.
One way industrial metal-cutting companies can meet this challenge is by building a diverse workforce and tapping into a demographic that is grossly underrepresented in manufacturing—women.
According to the U.S. Bureau of Labor Statistics, women comprise nearly half of the U.S. workforce, but just over a quarter of the manufacturing workforce. Although the reasons for the skewed representation are debatable, it is likely a combination of industry bias and stigma, and based on some research, disinterest on behalf of women.
A survey conducted by the trade group Women in Manufacturing revealed that only 7 percent of women selected manufacturing as a top career choice, and an overwhelming 68 percent are not likely to consider manufacturing as a career path. However, the survey also found that of the women currently working in manufacturing, 82 percent think the field offers interesting and challenging work, and 50 percent believe it offers good compensation. In other words, once women do choose manufacturing as their career, they are satisfied and are likely to stay.
Data also shows that the financial business case for building a diverse organization is strong. Fortune 500 companies with high percentages of women officers had a 35 percent higher return on equity and a 34 percent higher total return than companies with fewer women, according to this study conducted by nonprofit organization Catalyst and published by Deloitte. Plus, women represent a skilled talent pool: They earn more than half of the associate’s, bachelor’s and master’s degrees in the U.S., according to the National Center for Education Statistics.
So how can metals companies overcome the misconceptions of the manufacturing industry and help close the skills gap with women? A report commissioned by The Manufacturing Institute, APICS Supply Chain Council, and Deloitte lists several ways:
- Start at the top. Senior leaders must be aligned for change to take place in the manufacturing industry, which can help recruit and retain women talent. One way to reinforce your commitment is to create diversity and inclusion programs, set goals across the organization and then regularly communicate the progress of those programs and goals. This shows management holds diversity as a business priority.
- Address gender bias. Actively dispel bias about gender and leadership in the manufacturing industry. Targeted training can help executives consciously adjust their behavior and decision-making process to eliminate conscious or subconscious gender bias. Some companies even remove gender-related information on resumes so reviewers can focus on skills and capabilities.
- Create a more flexible environment. Work-life balance is an increasingly important factor across all industries, including manufacturing, and not only for women, but for Millennials and Baby Boomers as well. Metal-cutting companies can shift to focusing on results versus the time a worker spends on the job to help support workplace flexibility while maintaining production.
- Foster sponsorship. A formal or informal mentor program can help attract and maintain women in the manufacturing workforce. Support can range from creating roles and identifying sponsors and participants, building awareness of the program, and providing training and resources to participants. The Alcoa Foundation, for example, recently partnered with The Manufacturing Institute, to host a networking series developed to provide women in manufacturing the opportunity to hear from women industry leaders and connect with others.
- Promote personal development. Women ranked learning and development programs as one of the most impactful talent initiatives in their organizations. Companies should encourage top talent to target a higher role within the organization and then map out a career path to achieve that.
- Develop the manufacturing workforce early. With less overall interest in the manufacturing industry—and less formal education to support it—active encouragement for female students to pursue careers in manufacturing is needed. A new Forging Industry Women’s Scholarship is doing just that by introducing women into the manufacturing industry and enabling them to achieve their career aspirations in engineering, management, marketing, manufacturing and other comparable studies.
How are you working to build a diverse workforce in your industrial metal-cutting organization? Could hiring more women help you close the skills gap at your company?
General Metals Industry
December 1, 2015 / agility, circular sawing, continuous improvement, Cost Management, industry news, LIT, optimization, productivity, quality, ROI, strategic planning
Last month, executives from the metal forming, fabricating, and welding industries visited Chicago to walk the aisles of McCormick Place for Fabtech 2015. As to be expected, the trade show featured hundreds of new products and technologies. However, many are saying this year’s show was about more than just the latest gadget.
“A certain excitement permeated this year’s show, and it wasn’t just about this incredibly fast laser, that press brake that eliminates setup time, or that welding power source that connects to the cloud and simplifies welding parameter selection,” writes Tim Heston, senior editor, in a column appearing on thefabricator.com. “It was about how all these technologies and more can work together to make a shop better.”
Indeed, it seems the attitude of Fabtech attendees mirrors what several industrial metal-cutting leaders have found: Investing in new technology isn’t about simply cutting a little faster or reducing set-up time. It is about optimizing processes so that every area of the company can benefit—from shop floor operations and maintenance to quality and finance. As Heston writes: “…a fast laser alone won’t ship a product out the door any faster. Even the smallest shops now are tackling front-office planning, scheduling, and often investing in software to streamline information flow throughout an organization.”
In other words, managers should look at the big picture before adopting any new “groundbreaking” technologies. How will this new technology affect your entire operation? What other processes down the line will be impacted by the benefits of the new technology? Do these other processes need updating as well?
That’s not to say, however, that companies should shy away from investing in new technology. In fact, a recent article from manufacturing.net stresses that cutting-edge technology is critical in today’s marketplace.
“The manufacturing sector is a fast-changing, cut-throat industry,” Martin Hurworth, states in the manufacturing.net article. “Firms who make their living there should be constantly looking to invest in new technologies to make their operations smoother, smarter and swifter, not to mention more cost-effective. In a globalized world, staying at the sharp end has never been more important.”
According to Hurworth, strategic technology investment allows companies to improve in three key business activities:
- Sustain Growth and Meet Demand
- Ensure Quality
- Innovate Effectively
Jet Cutting Service has found this to be the case. Last year, the industrial metal-cutting company reached a record-setting 1.1. million cut parts in just one month—310,000 more cut parts than it typically produces on a monthly basis. “I would like to believe that our increase in sales is due to investing in the latest cutting technology, which increases our capacity and production capabilities,” Vice President Mike Baron says in a case study from the LENOX Institute of Technology. “The newer technology also allows us to offer competitive pricing, which has led to many new customers.”
Although Baron admits the financial commitment can be risky, he finds that many technologies are worth the investment. “We need to constantly keep on top of the latest technology out there,” Baron states. “We don’t want to spend extra money, but if it’s going to cut 20 percent quicker than I do now…then we’ll go after it.”
For example, a few years ago, Baron had eight different circular saw blade manufacturers come into his factory to see which blades performed the best. While the process was time-consuming, Baron said it was a huge learning experience for his team and ended up giving him a 20-percent cost savings in the long run.
Will the latest metal-cutting tool or gadget be the answer to all of your operational challenges? Of course not. However, when carefully considered from a strategic, long-term perspective, it could set your company on a growth trajectory you may not have achieved any other way.
What metal-cutting technology investments could positively impact your bottom line?